Daily Markets Update - $380M in 12 hours-September 11, 2020


$BTC appears to have found at least a temporary floor as its price action suggests as it is forming a rounded bottom and a higher high, and possibly a higher low, in lower time frames. Immediate support lies in the $10,000 mark, while the next test for bulls, if $BTC can move higher in the next couple of days, is in the $10,800 zone. Failure to hold the current support might mean bears could take $BTC down to $9,300, the highest volume node of the past 18 months. 

  • $BTC is now moving up from oversold levels in several indicators such as Stochastic RSI and RSI.

  • $BTC physical volumes increased from an average of roughly 33M to $52M traded in the last 24 hours with Bitmex Open Interest in the $580M mark, with longs paying shorts. 

  • Bitcoin Dominance is now just below 60% again, giving some alts room to breathe.

  • $ETH is trading at $371 at the time of this writing as it is successfully trying to reclaim $360 as support after running +18% from this weeks low.

  • $ETH/BTC is also advancing and trading now at 0.0358 with next resistance being 0.0375 as gas prices have incited additional platforms to be DeFi-ready.

  • DeFI market cap currently at 14.99B, up from yesterday's levels and now with over $7.11B in total value locked, with Lending related projects bouncing the most.

$380 million in 12 hours

-Paul Veradittakit


$380 million is how much capital went into a new project called Swerve in less than 12 hours! Swerve Finance is a fork of Curve Finance, which is a decentralized exchange that has accumulated over $1B in total value locked up and became known for its tight spreads between stablecoins. Curve launched not too long ago but had some scrutiny, as:

  1. Shareholders in the company would receive 30% of the token supply

  2. An anonymous farmer launched the token without warning

  3. Team taking more than 70% of the voting power

The developer behind Swerve goes by the name John Deere and stated that he wanted to improve all the things that were wrong with Curve by creating a product with a similar use-case BUT 100% owned by the community. The Swerve product was created in a unique way in that it was able to implement the copyright curve contract legally, see below what YFI creator Andre Cronje, who has a legal background, has to say:

What Swerve did, was add a proxy pattern, so the implementation is the copyright curve contract. But the storage is Swerve. This abides by the copyright, but also allows a full feature fork. Both from a legal and technical perspective, this is really smart. - Andre Cronje (YFI)

The Swerve launch was one of the best fair launches that I have seen:

  • There was no pre-mine (no allocations of tokens to anyone, no investors or team)

  • The only way to get tokens is to provide liquidity

  • Except for a hiccup in the UI of the homepage, no one knew when the project was launching for liquidity mining and everyone had a fair shot to start providing liquidity at the same time)

The token distribution below:



Within 12 hours, we saw 970 addresses that have deposited more than $377M in the protocol’s pool of stablecoins, currently at $414m of total value locked up.

How do you get started?

  1. Launch/click on the Swerve Finance App from their website

  2. Click on the header SWUSD, then click on Deposit header

  3. Deposit one or a set of stablecoins from DAI, USDC, USDT and TUSD

  4. After making your deposit, you can click on the DAO header

  5. In the DAO header, you can choose to lock up some of your tokens to get voting power and an increase boost of rewards, max is 2.5x (to calculate how many tokens equate to a certain reward multiplier, click on the CALC header)

  6. Lastly in the DAO header, you will be able to check the current APY (which is ~186%) and claim rewards

Governance?

The number of tokens that users hold is important as the number equates to having the ability to create proposals (need 2500 veSWRV) for voting and voting power. There are already 5 proposals that are being discussed:


I think these all make sense in the early beginnings of a projects as the code in these launches are not audited (beware of the risk!), incentives/fees aren’t nailed down yet, and there isn’t any clarity on how development/developers will be funded.

Another strategy to prevent a central point of failure of these smart contract projects is to have multiple signers, and Swerve is looking for 4 influential folks to serve this role.

What does this all mean?

The beauty of the blockchain is that it allows for transparency and automation. What comes with that is that the code is open-sourced and folks can fork (take the code) and create new use-cases and economics models with it. We’ve seen projects like Sushi and Swerve show that they can take liquidity from legacy players Uniswap and Curve but have a token model with more distribution and control to the community. Whether the founders/developers should be anonymous vs known is up for debate. Both Sushi and Swerve went with anonymity and had to build up trust through influencers while Yam has some recognizable names from the investor/entrepreneurial side.

What is also unknown is how much governance should be given to the community in the early stages of a project? Projects succeed because of having a large and sometimes nimble vision of how the product should develop. Will too much governance slow down innovation? What sort of things should be up for governance?

What I do know if that these new forks are launching with unaudited contracts so please beware, risk what you can bear to risk, and follow technical folks who are looking at the contracts. Vote for auditing of contracts shortly after launch. What I also know is that we will see more decentralized exchanges, decentralized stablecoins, and decentralized lending protocols being forked in the near future.


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